The credit-card giant and the startup focused on helping consumers build wealth by what it calls “democratizing financial services” unveiled their plan to combine almost exactly one year ago. The Justice Department filed suit in November to block the deal.
"We are confident we would have prevailed in court as Plaid's capabilities are complementary to Visa's, not competitive," said Al Kelly, chairman and chief executive of Visa, said in a statement.
Combining the San Francisco companies "would have delivered significant benefits, including greater innovation for developers, financial institutions and consumers," he said.
In a Nov. 5 statement announcing the lawsuit, the Justice Department begged to differ.
“American consumers and business owners increasingly buy and sell goods and services online, and Visa – a monopolist in online debit services – has extracted billions of dollars from those transactions,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said.
“Now, Visa is attempting to acquire Plaid, a nascent competitor developing a disruptive, lower-cost option for online debit payments.
"If allowed to proceed, the acquisition would deprive American merchants and consumers of this innovative alternative to Visa and increase entry barriers for future innovators.”
The complaint, filed in U.S. District Court for the Northern District of California, said the purchase price, $5.3 billion, was an "unprecedented" multiple of 50 times Plaid's revenue.
The filing quoted Visa's CEO as justifying the deal as a strategic, not financial, purchase because "our U.S. debit business is critical and we must always do what it takes to protect this business."
In Visa's statement on Tuesday, Kelly said “it has been a full year since we first announced our intent to acquire Plaid, and protracted and complex litigation will likely take substantial time to fully resolve."
Zach Perret, co-founder and CEO of Plaid, said, "We made great strides last year, growing our customers by more than sixty percent and adding hundreds of banks to our platform.
“While Plaid and Visa would have been a great combination, we have decided to instead work with Visa as an investor and partner so we can fully focus on building the infrastructure to support fintech."
Visa's shares at last check were trading off 0.9% at $207.04. They'd closed the regular Tuesday trading session down 1.9% at $208.86.